China on TikTok sale: Not so fast

Chinese officials have changed their rules on exporting technology, a move that could complicate a potential TikTok sale to a US company, says a report.

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Edward Moyer is a senior editor at CNET and a many-year veteran of the writing and editing world. He enjoys taking sentences apart and putting them back together. He also likes making them from scratch. ¶ For nearly a quarter of a century, he's edited and written stories about various aspects of the technology world, from the US National Security Agency's controversial spying techniques to historic NASA space missions to 3D-printed works of fine art. Before that, he wrote about movies, musicians, artists and subcultures.
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TikTok is in a face-off with the US.

Angela Lang/CNET

Chinese officials apparently have something to say about a TikTok sale to a US company, with two bits of news coming out of China that reportedly could make potential buyers such as Microsoft and Oracle wary.

China updated the country's export-control rules on Friday, to cover what it considers sensitive technologies, including, possibly, the popular video app's personalized recommendation engine, The New York Times reported Saturday.

And China's official Xinhua news agency published a commentary Saturday saying the new rules might mean TikTok parent ByteDance -- a Chinese firm -- would need to be granted a license before it could sell, the Times noted.

The news comes amid reports that a TikTok sale is imminent, and, the Times said, it indicates China's desire to prescribe the terms of a sale, though the government there might not prohibit one altogether. It's also another jab in the ongoing sparring match between China and the Trump administration.

"It could be an effort to outright block the sale, or just raise the price, or attach conditions to it to give China leverage down the road," a specialist on Chinese economic policy told the Times.

Citing fears over national security, US President Donald Trump issued an executive order Aug. 6 saying transactions with ByteDance or its subsidiaries would be prohibited. The order was set to kick in 45 days after it was issued, unless TikTok found a US buyer for its operations in the states. Trump later doubled that time frame, in an Aug. 14 follow-up order.

Trump and others say they're concerned because TikTok collects data on its users and could, these critics say, be forced by China's communist government to hand over that information. TikTok has repeatedly said the fears are ungrounded.

If the ban against transactions were to go into effect, it would likely mean that Apple and Google would no longer be able to list the app in their respective app stores.

So far, Microsoft, Oracle and "a third US company" have made bids on TikTok, CNBC reported on Thursday. (Microsoft had acknowledged early this month that it was pursuing a deal for TikTok's operations in the US, Australia, Canada and New Zealand.)

But the news about the export-control rules could make corporate shoppers nervous, the Times reported, saying, "Beijing's displeasure alone could scare off TikTok's suitors, many of whom have operations in China."

Asked about the Times report, both Oracle and Microsoft declined to comment. Requests for comment didn't receive responses from ByteDance, TikTok, the White House, or the Embassy of the People's Republic of China in the United States.